Conviviality has failed to secure emergency funding and confirmed plans to appoint administrators in the coming weeks, threatening over 2500 jobs.
Following a string of profit warnings within one month and the suspension of its shares on the junior AIM stock market, the Bargain Booze and Wine Rack owner has warned that “unless circumstances change” it will appoint administrators in the next 10 days.
It revealed in a statement to the stock market that investors had refused to grant its request for an emergency £125 million to prevent it falling into bankruptcy.
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Alhough it said it would continue trading as usual with the aim of preserving “as much value as possible” for its shareholders, it added they were likely to receive “little-to-nil” value for its shares.
Parts of the business are understood to be close to a potential sale, but Conviviality warned that many of the 20,000 pubs it supplies with its Matthew Clarke distribution division could face short-term supply issues.
This follows a dismal few weeks for the company, which included a miscalculation by a member of its finance team that led to the profit warnings and an overlooked £30 million tax bill in its projections.
The controversy prompted chief executive Diana Hunter to step down from the business, after five years of leading the off-licence retailer and alcohol supplier.
She was responsible for guiding Conviviality through its stock market flotation in 2013, as well as the acquisitions of Wine Rack, Matthew Clark and Bibendum.
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